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Monday, November 13, 2017

Backed by tax incentives, massive IT company to open in New Orleans, hire 2,000 people

Posted By on Mon, Nov 13, 2017 at 5:56 PM

click to enlarge From outside the Superdome Nov. 13, Gov. John Bel Edwards and officials announced DXC's plans to open an office in New Orleans in 2018 with 2,000 hires over the next several years.
  • From outside the Superdome Nov. 13, Gov. John Bel Edwards and officials announced DXC's plans to open an office in New Orleans in 2018 with 2,000 hires over the next several years.

A multi-billion dollar IT company expects to open its New Orleans office in January 2018, with plans to hire 2,000 people within the next several years — all part of a multi-tiered effort among state and local politicians and business groups, tax incentive programs, local higher education systems, and the company itself, DXC Technology, which courted several states before landing with New Orleans.

At an announcement outside the Superdome Nov. 13, city and state officials didn’t mince words about the company’s arrival.

Gov. John Bel Edwards called it a “historic” announcement, expected to create more permanent direct jobs than any other development in recent Louisiana history. Mayor Mitch Landrieu called it a “game changer” and “a transformational moment” for the city in advance of its 300th anniversary, with the company’s decision signaling a flag-planting moment for the city and large investors, that there’s “no way city will ever be turned around again.” Greater New Orleans Inc.’s Michael Hecht said the arrival of DXC “emphatically validates New Orleans as a place for business and tech.”

The company’s arrival follows the state’s post-Katrina push for tech profusion, bolstered by tax credits and an ongoing narrative among city leaders and public-private partnershipping programs that the city can and will “win” in the highly competitive tech industry.

The city’s last “win” with General Electric followed gains with Gameloft and IBM, among others. DXC is likely to be its biggest “win" yet.
The Virginia-based company was founded earlier this year following a merger between CSC and Hewlett-Packard’s Enterprise Services arm. The company, valued at $25 billion, employs more than 150,000 people providing data and other IT services for 6,000 companies in 70 countries. Its New Orleans “Digital Transformation Center” will serve as a “blueprint,” according to executive vice president Stephen Hilton.

For its New Orleans office, DXC will begin hiring 300 IT and other staffers, aiming for 2,000 over the next five years. Average salaries in New Orleans will be around $60,000. And it’s started hiring.

Edwards said the company’s arrival also will contribute $64 million in tax revenue from 2018-2023 with an estimated $3.2 billion regional economic impact and the creation of roughly 2,500 new indirect jobs.
Hecht and business groups have pitched New Orleans as a “low cost, high culture alternative” to other tech cities — particularly as companies look to cut down on labor costs by moving to relatively “cheaper” areas where cost of living also is "cheaper" compared to saturated tech hubs. Earlier this month, DXC CEO John Michael Lawrie suggested the company was doing that.

And the state is happy to oblige. DXC was lured to Louisiana with a $115 million tax incentive package, parts of which the state will use to fund faculty and curriculums within the state’s university systems to build a skill-specific jobs pipeline, along with nearly $19 million in performance-based grant funding

A state-funded $25 million higher education plan will work with Louisiana State University, University of Louisiana and the Louisiana Community and Technical College System on four campuses: LSU in Baton Rouge, the University of New Orleans, Southeastern Louisiana University in Hammond, and Delgado Community College in New Orleans.

Its $18.7 million performance-based grants will be payable over five years as the company gets off the ground in New Orleans. Those grants include a $15 million flexible performance-based grant, a $2.2 parking assistance grant, and a $1.5 million demolition grant.

The company also will work with the state-backed Louisiana Economic Development’s FastStart workforce development program.

Hilton told Gambit that as DXC opens, “we’ll be hiring skilled IT professionals,” not necessarily recent graduates, but the company will look to the “huge influx” of students as it begins to scale. 

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